March 27, 2008

Cost of Witness Depositions in a Civil Lawsuit

Attorney: Before we go to trial in your lawsuit, we’re going to need to collect enough evidence to be able to prove your case to a jury. Let's talk about the best way to do that, and the cost of that.

Client: You're charging me on an hourly basis in this case, correct?

A: Yes, my rate is $250 per hour. You have a straightforward, non-complex case. First, do you have any witnesses who will back up your version of events in the case?

C: Yes, several witnesses.

A: That’s good. Do you know if your opponent has any witnesses in his favor?

C: Yes, I think so. What do we do about that?

A: We first have to find out who those opposing witnesses are. We can do that by sending out a set of questions to the opposing side. We call them written interrogatories.

C: What do those questions do?

A: Some of the questions make the other side tell us who their witnesses will be at trial, or which persons have knowledge of your case. I’m talking about third-party witnesses here, not your opponent.

C: What happens once we know who they are?

A: We can serve subpoenas on those opposition witnesses to make them appear for deposition. If they have some documents that relate to your case, we can make them bring those documents with them to their depositions, too.

C: I’ve heard the word “deposition” before, but I’m not sure what it means. Is it something we do in court?

A: No. A deposition is a formal, pre-trial question-and-answer session between an attorney and a witness in a law firm conference room. We don't do it in court.

C: Tell me more about that.

A: The witnesses we want to depose are going to be the opposition's witnesses, meaning anybody who might testify against our side at trial. Those witnesses can bring an attorney with them to their deposition if they want to pay for that.

C: Exactly what happens at a deposition?

A: If I’m the one making the opposing witness show up for their deposition, I get to ask the witness a lot of questions about the case, to see what they know or don’t know. That's called cross-examination. Since I’m deposing them about their personal knowledge of the case, they’re called a fact witness.

C: Is there another kind of witness?

A: Yes, if they have some specialized knowledge, like a college professor or a doctor, they’re called an expert witness.

C: Like on “Law and Order” and other T.V. shows about lawyers?

A: That’s right. The witnesses who get called “Doctor So-and-So” on the witness stand are usually expert witnesses. The rest of them are fact witnesses.

C: What else happens at the depositions you take? Do I get to be there?

A: Yes, since you’re a party to the lawsuit, you can attend every deposition, if you want to sit in and watch. First, I put the witness under oath, just like in court, so they have to answer under penalty of perjury. Then I can ask them as many questions as I want.

C: Do you do anything besides ask them questions the entire time?

A: I can also look at any documents they bring with them, make copies for our side, and ask them questions about those documents during the deposition.

C: What is the goal of all this?

A: I’m trying to get an advance look, a preview, of what the opposing witnesses will say at trial and what documents the other side will try to use at trial. That’s the purpose of a deposition, to make sure we’re not surprised later on at trial by a witness.

C: What will the opposing attorney be doing at the deposition while you’re asking questions?

A: They will get notice of each deposition that I take, so they can attend. They have to let me ask my questions, but they might object to my questions here or there. If they become a real jerk about it and interfere too much, I can go complain to the judge.

C: Do we get to take the deposition of my opponent in this case, too, or just third-party witnesses?

A: When the time comes, I’ll prepare you to answer their questions at your deposition and review any documents you have that you’ll be required to bring with you. I’ll also be there to defend your deposition, to keep them honest and object to any improper questions.

C: How do you keep track of all the questions and answers at a deposition?

A: Each deposition has a court reporter in the room who takes down everything that’s said. It’s all put into a deposition transcript booklet. That's a typed booklet full of all the questions and answers from the deposition.

C: Who has to pay for that?

A: When I take someone’s deposition in the case, our side has to pay for the court reporter. When the other side takes a deposition, they pay for the reporter.

C: Do you need someone to take notes for you at the deposition?

A: No, I write down my questions beforehand. Then I’ll have my laptop computer with me, which I can hook up to the court reporter’s machine, and see the questions and answers on my computer screen in real time.

C: What if you catch a witness lying? Can we use that against them at trial?

A: Yes, that’s called impeachment. I’ll be trying to pin down their version of events in the case at their deposition to get them to commit to their story.

C: How do you impeach them at trial?

A: If they try to change their story at trial, I can pull out their deposition transcript booklet in front of the jury and read out loud the different answer they gave at their deposition. It would make them look bad. Juries don’t like witnesses they think are lying.

C: Can you impeach them at their deposition, too?

A: In a deposition, the witness will be prepared to answer my questions by their own attorney beforehand. So I don’t expect to “crack” a witness at deposition. I just try to get them to commit to their version of events. Then they can’t backtrack later at trial.

C: How many depositions do you think we’ll have to take? This is not a complicated lawsuit. It's pretty straightforward.

A: We’ll have to take your opponent’s deposition, plus all their fact witnesses who will testify at trial. Plus, if they identify any expert witnesses for trial, we’ll have to take their depositions, too. I’m thinking we’ll end up taking about 5 depositions by our side. That's not unusual.

C: Will all 5 of those depositions work the same way?

A: Yes, I’ll have to prepare for each of them. They’ll be held at my office here, since our side is noticing and taking them. We get home court advantage for those, which means I won’t have to travel to some other location.

C: You’re still talking about the depositions that our side will take, right? What will the other side do?

A: The same thing. Let’s assume 5 more depositions by their side. They will take your deposition, plus our side’s fact witnesses and any experts we decide to identify for trial.

C: When will we decide if we need any expert witnesses?

A: If they disclose an expert in a particular field to testify for them at trial, we’ll probably want our own expert in that same field, too, to offset theirs.

C: What will you be doing at the depositions the other side takes? Not asking questions, right?

A: Right. The opposing attorney will be asking all the questions. I’ll just be listening to the witness's answers. I’ll also be objecting to the opposing attorney’s questions if I think they’re improper. That's called defending the deposition.

C: This is starting to sound expensive. How much do you think all these depositions will cost?

A: Depositions are expensive. In fact, the part of the case called pre-trial discovery, which is when each side tries to collect all their witnesses, documents, and other evidence to prove their case at trial, is the most expensive part of any civil lawsuit.

C: How expensive?

A: The discovery phase of a typical lawsuit like yours can cost up to 70% of the total legal fees in the case. Depositions are just one aspect of pre-trial discovery, but an expensive aspect.

C: Then do we really need to have so many depositions?

A: We can decide how many depositions we want to take, but we have no control over the number of depositions the other side decides to take. If your opponent has lots of money, they could try to bury you in depositions and all the legal fees. That happens in litigation.

C: Can we do anything about that?

A: Unfortunately, no. I have to attend each time they take a deposition of some witness. I need to get a preview of how each witness will look and sound under cross-examination in front of a jury at trial.

C: Is it really necessary, from a cost standpoint?

A: I’ve seen many witnesses over the years who wanted to be helpful, but who ended up looking and sounding so bad at their depositions that they would've hurt more than helped at trial. They either came across as too nervous on cross-examination, like they might be lying or hiding something, or they couldn’t remember enough of the facts.

C: So the deposition process is as much about weeding out potentially bad witnesses as finding good witnesses?

A: Exactly. The jury won’t be impressed with bad witnesses, so we want to weed them out beforehand. Basically, we use pre-trial discovery and depositions to learn both the strengths and weaknesses of our own case, so we don’t get unpleasantly surprised at trial.

C: Let's talk about the actual cost of the depositions. First, what about the depositions that the other side will take of our witnesses?

A: There will be the cost of my time for preparing you and our other witnesses to testify. I’ll meet with each of you beforehand to rehearse the types of questions you’ll be asked, discuss possible answers with you, and look at any documents that the opposing attorney has asked you to bring with you to your deposition.

C: So that's the cost for preparation. What else?

A: For our side's witnesses, I’ll have travel time to the opposing attorney’s law office, where the depositions will take place. Then there will be the cost of my attending and defending those depositions.

C: So how do we add up the cost of all those steps?

A: First, let’s assume your deposition will last one full day. Because you’re a party to the lawsuit, not just a third-party witness, that’s a fair time estimate. I’ll probably spend 4 hours meeting with you beforehand. Assume 1 hour round-trip travel time, plus 8 hours with you at your deposition. That adds up to 13 hours of my time, multiplied by my hourly rate of $250 per hour.

C: So that’s about $3,250 in your fees just for my deposition?

A: That’s right. Remember, whenever I quote you the cost of a deposition, it's only a rough estimate. It could be more if the opposing attorney decides to go into a second day of questioning the witness. I’ve seen that happen before, even in a straightforward lawsuit like yours.

C: What will the rest of our fact witness depositions cost? You thought the other side would take 4 of them, besides me.

A: Let’s assume I spend only half of your preparation time with the other fact witnesses, say 2 hours, and their depositions only take half as long as yours, or 4 hours each. To keep it simple, I estimate each of their depositions should cost roughly half of your $3,250. Let's say $1,600 each in legal fees. Again, that’s a rough estimate.

C: So if my deposition costs $3,250, plus 4 other fact witnesses at $1,600 each, all 5 of them will add up to $9,650. That's almost $10,000 in legal fees to me, just for the depositions that the other side takes of our witnesses, right?

A: Unfortunately, yes. Then assume we will have to spend roughly the same amount of money yet again to take about 5 depositions of their fact witnesses, including your opponent. It's not exactly the same cost, but close enough. But there won’t be any travel time for me, because I’ll be taking those depositions at my office here.

C: Are there any other deposition costs I should know about?

A: Yes, our side has to pay for the court reporter each time we notice and take a deposition ourselves. That can cost up to $1,000 per deposition. When the other side is taking the deposition, they pay for the court reporter, not us.

C: Let me see if I’m keeping all this straight. I should expect to pay about $10,000 in legal fees for the other side’s depositions of our witnesses, plus another $10,000 for our side’s depositions of their witnesses, plus up to $5,000 more for a court reporter to handle the 5 depositions we take. Bottom line, that’s roughly $25,000 minimum just to complete all the depositions in the case?

A: Yes, just for the fact witness depositions. We'll have to talk later about a separate budget for written discovery requests by both sides, such as interrogatories, and for reviewing and handling your documents and the other side's documents in the case. That's part of pre-trial discovery, too.

C: Besides what you've already told me, is there anything else I should know about the cost of depositions in my case?

A: Yes, we’ve only talked about depositions of fact witnesses so far. If we or the other side decide to use expert witnesses at trial, too, that would add to the deposition budget.

C: We better go over that together.

A: Each expert witness deposition always costs much more than a fact witness. Expert witnesses usually charge a few thousand dollars per day, or more, for their time. They are professional witnesses who are very distinguished individuals in their chosen fields.

C: What should the expert budget be?

A: I would estimate that, if we hire an expert and they get deposed for a half-day by the other side, it will cost about the same amount in legal fees for me to prepare for and attend their deposition as for one of our fact witnesses. Remember I estimated that would be about $1,600 in legal fees.

C: But there’s more, right?

A: Yes, because you have to include the expert’s own hourly fees for studying your case, forming their expert opinions, and then sitting for their deposition. In a straightforward case like yours, an expert might charge a total of $5,000 - $20,000 to do all that. I’ve seen some expert witnesses in really big lawsuits charge into the six figures for their services.

C: So in addition to the $25,000 for fact witness depositions by both sides in the case, I should also plan on spending up to $20,000 more for a single expert witness for trial?

A: That’s about right. To be safe, at the end of the day, you should be prepared to spend $25,000 - $50,000 for all the depositions in this case, depending upon whether we need an expert or not. It’ll be the lower dollar amount if we don’t, the higher amount if we do. Hopefully we wouldn't need more than one expert.

C: Are those conservative estimates?

A: Well, anything can happen in a lawsuit. As a client, you always need to remember that. One of the reasons that clients sometimes end up paying far more than they first planned in legal fees in a lawsuit is because certain factors end up being beyond their control, or their attorney’s control.

C: Give me some examples of that.

A: For instance, we can’t know right now, in advance, how many depositions the other side will take. The other side might try to bury us in depositions. We also don’t know what our judge in this case will make us do as we head toward trial.

C: So, as a client, I should always be prepared for contingencies in the case, which could cost extra?

A: Absolutely. Clients sometimes get mad at their attorneys for big legal bills, when it’s not really their attorney’s fault. As your attorney, half the time I may simply be reacting to what the opposing side or the judge is making us do. But that still takes my time, and costs you legal fees. I can't do anything about that.

C: Is there anything you can do to keep the legal fees down for the depositions?

A: Yes. I will be handling the more important depositions myself at my $250 per hour rate. But there may be other, more minor depositions that I can delegate to the younger associate attorneys in my office who will be helping me on your case. My associates only charge $150 per hour, so that would save money on deposition costs.

C: Just talking about the cost of depositions, it sounds to me like I really need to decide if I have the willingness, as the client, to spend a lot of money to take this case all the way to trial.

A: Yes, if that’s what you really want, you have to be prepared to make a big investment in legal fees and maybe expert fees, particularly for pre-trial discovery and depositions.

C: I've heard about mediation, which is supposed to be a way of settling cases before trial. Is that option available?

A: Yes, we can talk about pre-trial mediation afterward. Just remember one thing. If you really don’t think you want to pursue this lawsuit for whatever reason, consider settling with our opponent before you sink too much money into pre-trial discovery and depositions. They will cost the majority of the legal fees in the case.

C: You've probably had clients who wished they'd settled instead of spending so much money on legal fees by the time of trial.

A: Unfortunately, yes. But I’d rather forgo the legal fees and avoid an unhappy client who gets buyer’s remorse later on and then blames me for the amount of the legal fees. That’s when clients stop paying their attorneys, when they get buyer’s remorse, even if it’s not their attorney’s fault.